cutting credit card with scissors

A recent internet search for “the average number of credit cards per Canadian” provided the following interesting facts:

  • There were 76.2 million credit cards in circulation in 2021 (Source: Statista)
  • 78% of Canadians have a reward linked to their credit card (Source: Payments Canada)
  • The average Canadian carries 1.4 credit cards (Source: Canadian Bankers Association)
  • As of 2021, the lowest among Canadian credit card rates is 8.99% (Source: Rate Hub)
  • During the pandemic, 60% of Canadians paid for transactions using credit cards (Source: Bank of Canada)

Let’s face it, using credit cards provides many benefits like earning rewards, contactless payment and a grace period to pay cash for the purchase.  Accumulating several credit cards, with increasing balances and high interest rates offsets any potential benefits.  If you are struggling to pay off multiple credit cards, here are a couple of tips:

  • Speak to your bank manager to see if you are eligible for a debt consolidation loan to pay off all your credit cards in full and then only have one monthly loan payment.  
  • Make minimum payments on all of your credit cards but concentrate on paying down the highest interest-bearing card first.  Review your monthly expenditures and see where you can cut back on discretionary expenses (like entertainment, eating out, etc.) to increase the payments on your highest-interest-bearing credit card.
  • While you are paying off your credit cards, put the cards away in a safe place to avoid easy access to use.
  • Once a credit card is paid down, decide whether to cancel the card to avoid future abuse or if you want to retain it for responsible use once all your cards are paid off.
  • Try to use only one credit card for budgeted purchases (food and gas) and pay that card in full as due each month.  
  • Once the highest interest-bearing card is paid, concentrate payments on the next highest interest-bearing card.  

If you are unable to pay off your credit cards on your own over a reasonable time period, contact a Licensed Insolvency Trustee for a free, initial consultation of debt relief solutions like a debt management program, consumer  proposal or bankruptcy.

Kathy portraitBy Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)